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Though Citicorp is deemed too
big to fail, it's hardly reassuring to know that it's been
allowed to sink its fangs into the Mother Zombie that the US Treasury has
become and sucked out a multi-billion dollar dose of embalming fluid so it
can go on pretending to be a bank for a while longer. I employ this somewhat
clunky metaphor to point out that the US Government is no more solvent than
the financial zombies it is keeping on walking-dead support. And so this
serial mummery of weekend bailout schemes is as much of a fraud and a swindle
as the algorithm-derived-securities shenanigans that induced the disease of
bank zombification in the first place. The main
question it raises is whether, eventually, the creation of evermore zombified US
dollars will exceed the amount of previously-created US dollars now vanishing
into oblivion through compressive debt deflation.
My guess,
given the usual time-lag factor, is that the super-inflation snap-back will
occur six to eighteen months from now. And the main result of all this will
be our inability to buy the imported oil that comprises two-thirds of the oil
we require to keep WalMart and Walt Disney World
running. At some point, then, in the early months of the Obama
administration, we'll learn that "change" is not a set of mere
lifestyle choices but a wrenching transition away from all our familiar and
comfortable habits into a stark and rigorous new economic landscape.
The credit economy is dead and the dead
credit residue of that dead economy is going where dead things go. It came
into the world as "money" and it is going out of this world as a
death-dealing disease, and we're not going to get over this disease until we
stop generating additional zombie money out of no productive activity
whatsoever. The campaign to sustain the unsustainable is, besides war, the
greatest pitfall this society can stumble into. It represents a squandering
of our remaining scant resources and can only produce the kind of extreme
political disappointment that wrecks nations and leads to major conflicts
between them. I don't know how much Mr. Obama buys into the current
adopt-a-zombie program -- his Treasury designee Timothy Geithner
was apparently in on this weekend's Citicorp deal -- but the President would
be wise to steer clear of whatever the walking dead in the Bush corner are
still up to.
All the activities based on getting
something-for-nothing are dead or dying now, in particular buying houses and
cars on credit and so it should not be a surprise that the two major victims
are the housing and car industries. Notice, by the way, that these are the
two major ingredients of an economy based on building suburban sprawl. That's
over, too. We're done building it and the stuff we've already built is
destined to loose both money value and usefulness as the wrenching transition
goes forward.
All this obviously begs the
question: what kind
of economy are we going to live in if the old one is toast? Well, it's also
pretty obvious that it will have to be based on activities productively aimed
at keeping human beings alive in an ecology that has a future. Once you grasp
this, you will see that there is no reason to despair and more than enough
for all of us to do, so we can recover from the zombie nation disease and get
on with the next chapter of American history -- and I sure hope that Mr.
Obama will get with the new program.
To be specific about this new economy,
we're going to have to make things again, and raise things out of the earth,
locally, and trade these things for money of some kind that we earn through
our own productive activities. Don't make the mistake of thinking this is
optional. The only other option is to go through a violent sociopolitical convulsion. We ought to know from prior
examples in world history that this is not a desirable experience. So, to
avoid that, we really have to put our shoulders to the wheel and get to work
on things that matter, and do it at a scale that is consistent with what the
world really has to offer right now, especially in terms of available energy.
In my view -- and I know this is
controversial -- a much larger proportion of the US population will have to be
employed in growing the food we eat. There are many ways of arranging this,
some more fair than others, and I hope the better angels of our nature steer
us in the direction of fairness and justice. The prospects of a devalued
dollar imply that we very shortly will not be able to get the all the
oil-and-gas based "inputs" that have made petro-agriculture
possible the past century. The consequences of this are so unthinkable that
we have not been thinking about it. And, of course, the further implications
of current land-use allocation, and the property ownership issues entailed,
suggests formidable difficulties in re-arranging the farming sector. The
sooner we face all this, the better.
As the fiesta of
"globalism" (Tom Friedman-style) draws to a close -- another
consequence of currency problems -- we'll have to figure out how to make
things in this country again. We will not be manufacturing things at the
scale, or in the manner, we were used to in, say, 1962. We'll have to do it
far more modestly, using much more meager amounts
of energy than we did in the past. My guess is that we will get the
electricity for doing this mostly from water. It may actually be too late --
from a remaining capital resources point-of-view -- to ramp up a new phase of
the nuclear power industry (and there are plenty of arguments from the
practical and economic to the ethical against it). But we have to hold a
public discussion about it, if only to clear the air and get on with other
things, namely the new activites of alt.energy. But I would hasten to warn readers (again!)
that we'll probably have to do these things more modestly too (don't count on
giant wind "farms"), and that we are liable to be disappointed by
what they can actually provide for us (don't expect to run WalMart on wind, solar, algae-fuels, etc).
In any case, we're not going back
to a "consumer" economy. We're heading into a hard work economy in
which people derive their pleasures and gratification more traditionally --
mainly through the company of their fellow human beings (which is saying a
lot, for those of you who have forgotten what that's about). Our current
investments in "education" -- i.e. training people to become
marketing executives for chain stores -- will delude Americans for a while
about what kind of work is really available. But before long, the younger
adults will realize that there are enormous opportunities for them in a new
and very different economy. We will still have commerce -- even if it's not
the K-Mart blue-light-special variety -- and the coming generation will have
to rebuild all the local, multi-layered networks of commercial inter-dependency
that were destroyed by the rise of the chain stores. In short, get ready for
local business. It will surely be part-and-parcel of our local food-growing
and manufacturing activities.
I hate to keep harping on this --
but since nobody else is really talking about it, at least in the organs of
public discussion, the job is left to me -- we have to get cracking on the
revival of the railroad system in this country, if we expect to remain a
united country. This is such a no-brainer that the absence of any talk about
it is a prime symptom of the zombie disease that has eaten away our brains. Automobiles
(the way we use them) and airplanes are utterly dependent on liquid
hydrocarbon fuels, and you can be certain we'll have trouble getting them. You
can run trains by other means -- electricity being state-of-the-art in those
parts of the world that do it most successfully. I know that California just voted to create a high-speed rail link
between Los Angeles and San Francisco. It's an optimistic sign, but
it shows more than a little techno-grandiose over-reach. High speed rail
would require a mega-expensive re-do of the tracks. We need to scale our
ambitions for this more realistically. California
(and every other region of America)
would benefit much more from normal-speed trains running every hour on the
hour on tracks that already exist than from a mega-expensive, grandiose
sci-fi program that might not get built for ten years. The dregs of the Big
Three automakers can and should be reorganized to produce the rolling stock
for a revived railroad system.
Even amidst the financial carnage
underway right now, the public is enjoying a respite from high-priced
gasoline, but it is due to be short-lived. As I've already said, we are in
danger not just of oil prices going way back up again, but of losing access
to our supplies from the exporting countries. In other words, we're just as
likely to face shortages as high prices, and soon. Oil shortages are certain
to produce a political freak-out here unless we get our heads screwed on
right -- and this means that Mr. Obama had better prepare quickly for a
comprehensive action plan in the face of such an emergency (which has to
include a robust public information initiative).
In the meantime, Mr. Obama must
dissociate himself from all activities aimed at the care-and-feeding of
zombies. Mr. Obama is correct that there is one president and one government
at a time, and since this is the case in reality, he must avoid being
contaminated by the choices they make as their clock ticks out. Obviously,
world markets might be more disturbed if Mr. Obama were to step up and
actively contradict everything that is being done to cultivate zombies right
now. He is in a very delicate position. But being a man of intelligence and
sensibility, he may successfully navigate this rough passage.
That this melt-down is building straight
into the Christmas holidays is one of those accidents of history that leaves
one reeling in wonder and nausea. The cable networks better be prepared to
bombard the public with round-the-clock showings of It's A Wonderful Life, because
they're going to need all the moral support they can get as zombies stalk
through the silent night, holy night.
James Howard Kunstler
www.kunstler.com/
My
new novel of the post-oil future, World Made By Hand, is
available at all booksellers.
James
Kunstler has worked as a reporter and feature
writer for a number of newspapers, and finally as a staff writer for Rolling
Stone Magazine. In 1975, he dropped out to write books on a full-time basis.
His
latest nonfiction book, "The Long Emergency," describes the changes
that American society faces in the 21st century. Discerning an imminent
future of protracted socioeconomic crisis, Kunstler
foresees the progressive dilapidation of subdivisions and strip malls, the
depopulation of the American Southwest, and, amid a world at war over oil,
military invasions of the West Coast; when the convulsion subsides, Americans
will live in smaller places and eat locally grown food.
You
can purchase your own copy here : The Long
Emergency . You can get more
from James Howard Kunstler - including his artwork,
information about his other novels, and his blog - at his Web site : http://www.kunstler.com/
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